1.

Summary

The Business

Small private enterprise for the production of toys was founded in 1956. And nowadays

company WADER QUALITY TOYS GE(hereinafter WADER) export quality toys for

children in 60 countries, while maintaining, at the same time, the property in their

homes. All children's toys from idea to production and marketing, are exclusively "at

home" in two cities in Germany - Radevormwald and Elterlayne. In 2009, the company

WADER has released more than 300 kinds of toys for children.

WADER QUALITY TOYS RUSSIA was incorporated on 2nd December 2009 as a public

limited company in Russia. The shares of the company listed on all stock exchanges of

Russia.

The basis of long-term success of the company WADER QUALITY TOYS RUSSIA is a

diverse, constantly updated assortment of toys, direct links with factories producing, and

as a consequence, lowers prices for products.

Distribution

Company got a very wide distribution network, retailers and whole sellers throughout

the country.

Aggressive inside sales and knowledgeable interaction is critical to keeping the

customer loyal to The “Vadim’s Toy House”.

As a secondary distribution approach, vendor catalogs are available to the consumer for

information and provide door-to-door distribution.

2. Marketing research
On the positive trends in the market of toys showed the following data: its volume is

currently estimated at $ 670-720 million per year and there is a high stable growth in

recent years in an amount equal to an average of about 30%.

Obviously, in relation to the current financial crisis affecting the markets in both

developed and developing countries, as well as a sharp decline in the volume of liquidity

constraint interbank lending, the alleged growth of the market as a whole and its

individual segments may fall in future years.

However, in the long-term growth rate is appropriate, and consider being relevant.

Yet to date, Russia's toy market was far from saturation. At the tween market segment

in Russia covers its share of toys, which is less than 10%, as total capacity of Russia's

market of children's goods is estimated at about $ 10-12 billion, global toy market is $

90-100 billion. Thus, the entire volume of Russia's submarket of toys (in retail prices) is

less than 1% of global sales volume of this type of product that allows us to make an

assumption about still untapped potential for the existing market in Russia.

The market for many years, remains opaque, for it is still a high proportion of illegal

imports and counterfeit products (according to various estimates, up to 60-70% of total

imports), this is especially characteristic for the segment of toys, which are mainly

imported from China and South – Asia. Thus, according to the research, official imports

cover 80-90% of the market. From this it follows that the share of domestic production of

toys is very small - no more than 10-20%.

Among the Russian toy manufacturers dominate such companies: P.L.C. "Spring",

L.L.C." "Zvezda", L.L.C." "horizon", L.L.C."Zolushka", the toys factory “Ogonyok”, only

in Russia there are about fifty manufacturers of toys. One of the largest foreign

manufacturers and suppliers of toys on Russia's market are the companies: Barbie As

Rapunzel, Bratz Salon 'N' Spa, Cabbage Patch Kids, Chicken Dance Elmo, FurReal
Friends, LEGO Harry Potter Chamber of Secrets, Yu-Gi-Oh! Trading Game Booster

Pack Collection Tin

The structure of Russia's toy market, by producing countries, is follows: 70% of toys on

the market make China, 20% - Europe 10% - Russia. The Following countries present

Europe: Poland, Germany and Spain.

Issues and opportunities in front of the competitors

STRENGTHS:

• We are the pioneers of this new type product, which is launched for the first time

in Russia.

• Introducing our product on a competitive price strategy.

• Timely & effective Distribution Network.

WEAKNESSES:
 • Huge capital investment will be required for aggressive promotion.

OPPORTUNITIES:

• With our expansion plan and capacity we can enter into product mix, which can

save us from the declining phase.

THREATS:

• Already built in market for imported toys.

• People always resist buying new product & new Brand.

• Competitor’s offensive strategy can give us tough time.

• Political instability and crises can affect smooth running of business.

3. Market Segmentation

In Russia segmentation by geographic characteristics can be made as follows: State -

Siberia, the Urals; region - Leningrad, Moscow, Nizhny Novgorod; district - Kolomna,

the Resurrection, the size of the city - with a population of less than 5 thousand people,

5-20 thousand, 20-50 thousand etc; density - cities, suburbs, rural areas. Segmentation

was carried out based on analysis of territories on the level of income and fertility.

Focusing on Russia's reality, with segmentation by demographic characteristics can

select main groups of buyers toys: parents with children 3-6 years old (45,3%),
proportion of parents with children 0-3 years is 43.2%, parents with children 7-9 years -

34,3%, parents with children 10-12 years - 23,7% and parents with children 13-15 years

old - 12, 3%.

Kids represent an important demographic to marketers, because they have their own

purchasing power, they influence their parents' buying decisions and they're the adult

consumers of the future.

Most actively bought toys in families with children of age less than five years: 87% of

these households buy toys at least once in three months. Than older child becomes,

more expensive toys he buys.

More and more popularity between children, in the segment from 0 to 3 years, take

developing games. The fact is that on the one hand, parents seek to identify children's

abilities as soon as possible, and begin to develop them, on the other hand there is an

understanding among them that the toy is the subject of forming a common vision and

culture of the younger generation. Situation when parents tend to offer for the toddler

wide selection of toys, trying to stimulate his development, is very attractive for the

producers, of course for our company as well, and causes a high potential of this market

segment.
Segmentation consumers by the family income status can be divided In two groups:

- Families with low income(less than 7000 rubles per month). Approximately from 1

to 6 toys for six months.

- Families with high income (more than 7000 rubles per month). Families with high

income can afford much more toys for their children, and it can vary from 6 till

few tens of toys for 6 month. Of course products they buy are with a higher price

and quality.

Also, we can divide our main consumers by gender. Children of both genders choose

their game toys with various emotional and moral characteristics. For girls such qualities

are kindness, cheerful disposition, willingness to help, the ability to make friends, for

boys - the strength and courage.

From statistic data we took information about favorite children toys in population of

Moscow:

Boys in %: A soft toy 8,6; Railroad 8,8; Transformer 9,0; Assembled model of a car, a

ship, a plane, etc. 9,5; Soldiers 10,7; Remote-controlled car 12,8; A gun, other toy

weapon 13,0; Ball 16,7; Car 19,9;Lego 20,5.

Girls in %: Musical instrument 6,4; Skipping-rope, hoop 7,0; Doll's belongings (furniture,

clothes, pets, a car) 7,5; Other table game 8,0; A set for sewing, modeling, knitting 8,2;

Ball 8,7; Mosaic (puzzle) 12,6; Other doll 15,8; Barbie or Barbie-like doll 22,2; A soft toy

37,3.

4. Marketing Mix

Product
After conducting public Gallup polls we made conclude that modern parents prefer to

choose mostly educational toys. Which are improving the learning and intellectual skills

of the kids. These toys are attractive, colorful, doesn’t have sharp edges, children can

handle them without any difficulty. All these features give certain adventures and priority

of selection by target customers.

Toys are made colorful, by painting them with natural oil based paints, these paints

can’t be rubbed off and don’t provide any poisonous harm if the child puts it in to his

mouse.

The toys made by our company are basically meant for providing fun, pleasure for the

child and make the child able to learn something.

These educational toys are made for children of age between 4-11 years.

Toys for children of age between 4-5 years:

a. AZ-Table

It is an educational toy, which will help the children to learn and improve their mental

and intellectual abilities, painted with colorful pictures and alphabet, this toy will be

creating an atmosphere for children in which they can learn with fun. The toy is for both

baby-boy and baby-girl. It means we have good market to target in the shape of both

genders.

The quality and the product safety is not compromised at any cost, the paint which is

used on the toy for pictures and alphabet is natural oil paint which isn’t harmful for

human use , even if it is swallowed by the child while playing and it can last for a long

time on the product, to beautify it.

The purpose of introducing this educational toy is to make children learn something out

of it, without putting any burden on them. In this way the company will be able to make

children to consider their toy as a source of fun and pleasure for them rather than just

an educational source for them.

The toy is in the packing which should also be attractive and will also be protecting the

toy from any kind of damage which reduces the beauty of the toy.

The company will also be providing after sales service, if any child breaks his toy while

playing with than customer can come to company and ask for repair at very nominal

charges which will be according to the damage.

b. EduBlocks Giant Soft Interlocking Stackable Blocks. These blocks help to

promote better motor skills through building as well as help children learn pretend

play. They are colorful and soft, making them safe for toddlers. Edublocks are

perfect for children with sensory integration disorder, in particular, those with

proprioception issues. Proprioception is our ability to know where our muscles

and joints are in space and how they are moving. This is very important for the

development of body awareness.

c. There Was An Old Lady Story Sack Activity Book. Storysacks offer a multi-

sensory approach to the sharing of books and encourage a life-long love of

reading. Each set includes a large cloth bag containing a picture book with

supporting materials to stimulate reading activities. To bring the book to life, soft

toys of the main character, props relating to items in the story, a non-fiction book

relating to the fiction theme, an audio tape and a language game based on the

book are included. Also contains ideas suggesting ways to develop listening,

reading and writing skills using the contents of the Storysack.

Toys for children of age between 5-12 years:

 a. Lego Tech Machines Construction Kit. The Tech Machines Set allows kids to

take their first steps into science and technology! With this fun and engaging set,

kids enhance their problem-solving skills while improving communication skills.

b. GEO Safari Talking Globe Game. It's an effective teaching globe as well as a fun

quiz machine.

c. Brain Quest Board Game . Since players compete at their own age levels, BRAIN

QUEST is designed for children of different ages to play together and it actually

makes learning fun!

d. The game for grades 1 - 6 includes more than 1,500 questions on school-related

subjects.

All toys are wrapped in beautifully desined packs over which the picture of the toy along

with the brand name is printed. The paking material is durable and it will not be wasted

after taking the toy out of it.

Our company is providing after sales services to the customers. The telephone numbers

and the addresses of the company office is printed on the pack and on the catalog.

Price

Our organization main purpose to improve current market position, the best way to do it

is to establish good reputation in our customers mind and provide them best possible

services at the competitive and affordable price.

For at least first year the company will just charge 15 % profit of total cost. Consumer

buys the roduct only if the perceived value is equal or greater than perceived price. For

the first year company will try to increase the perceived value of the product and will

provide the product on less than perceived price for consumer for this company and
reduces it profit by less 20 % if needed and will try to develop a good reputation in the

consumers mind.

Our company will be following the sale orients strategies which will be benefiting the

organization for the long term sustainability and profitability. The company will try to

provide the maximum benefit to the customer even if the company will have to reduce

it’s per unit profit. The company will try to maximize the perceived benefit in the

consumers mind.

Pricing:

WADER QUALITY TOYS RUSSIA company is a for-profit-organization having goal to

maximize the profit. But in the beginning the price of our toys is relatively less and we

try to provide our customers a satisfaction at lower prices.

Promotion

Direct marketing

In the beginning the company will adopt face to face communication route, the owners

will go to the toy shops, schools, fast-foods restaurants and to make them aware of the

toys by showing them the catalog, telling them the benefits which the children can get

from their toys by comparing them with other toys available in the market.

Public relations

Our company will fosters its goodwill and understanding between customers by means

of public relations, this is because consumers today are more sophisticated; they want

to know that the company that they buy from, understands their concerns such as

health care and protection from environment. Viewing this, our company is adapting the
way of public relations as this concerns can be best addressed through a strong public

relations program.

Place or Physical Distribution

Makin sure that a product is easily accessible to consumers can enhance value in their

eyes. The road through our company’s products move to the final customers is the

direct marketing. The product will be taken directly to the retailers equipped with

stationary, to collect the data of the customers, will serve the customers, show them the

catalog and when they become ready to buy, on the spot provide them with their

desired toy.

Our distribution channel will be:

1. Producer ----- Distributor ------- Retailer------ Consumer.

This channel will be used to make our product available in the market for customers’

convenience. It will be ensured that our product is extensively placed in all the well

known shopping centers of Karachi, which comes under our potential and target market

area.

2. We will also use push strategy for our product by using various promotional

tactics and through media. Distribution will be divided in zonal basis, which will be 5 in

number.We will directly approach retailer by providing credit facility and bonus in form of

incentives.

We will also provide trade allowances to our distributors and retailer to further intensify

usage of push strategy.

The list of retailers and their location:

 MARKET LOCATION

.
1. SUNNY DHORAJI Moscow

2. QADRI Novgorod

3. NAVEED Saint Petersburg

4. RAFIQ Chiboksar

5. GALAXY Balta

6. JUMBO Volgograd

7. INDUS STORE Vladivostok

8. GULISTAN STORE Moscow

9. BLESSINGS SUPER STORE LALKOTI

10. BADSHAH Moscow

11. COLLECT Moscow

12. FIVE STAR NEAR TNT NURSERY

13. SUPER MART Moscow

14. CROWN Novgorod

15. QT DEFENCE Moscow

16. SUNNY DEFENCE Novgorod

17. JABBAR DEFENCE Novgorod